HARTFORD, CT — A working group of individuals from the business, real estate, legislative, and environmental communities met for the first time Thursday to figure out how to get hundreds of Connecticut properties back on the tax rolls.
In a small room at the Legislative Office Building, Sen. Joan Hartley, D-Waterbury, sought to define the task at hand and divide the group into subcommittees. They have until Feb. 1, 2020, to make recommendations to the legislature.
Their task is to clarify the Connecticut Property Transfer Act, which was adopted in 1985 to encourage the clean-up of environmentally challenged properties. However, in its current form, the legislation is impeding economic growth and has produced none of the desired environmental outcomes. The bill includes 28 exemptions to a process that is designed to require prospective property owners to verify that a given property has been cleaned up and is ready for redevelopment. The state Department of Energy and Environmental Protection (DEEP) has to verify the findings of a licensed environmental professional that cleanup standards have been met for a given property before a developer can begin using it.
The DEEP, however, has only two employees assigned to the task of verifying property transfers under the act, which limits them to processing about 78 properties a year.
“We all want a clean environment, as clean as it can be, but that’s the stakes here,” Sen. Norm Needleman, D-Essex, said. “Fixing this means a lot to the state of Connecticut.”
Unlike brownfields, where generations of industrial waste have been dumped, Transfer Act properties have histories of lower-level pollution. Sales of Transfer Act sites can be held up over as little as a few dozen gallons of pesticides, one-time disposal of waste paint or ink, or contamination from chemicals used for dry cleaning or furniture stripping materials during any one-month period over the last 30 years.
There have been around 470 Transfer Act filings with the DEEP over the past five years and a total of 7,200 filings since the Transfer Act was adopted 34 years ago. The properties are spread across 158 of Connecticut’s 169 municipalities.
There have also been legal disputes over whether a property falls under the Transfer Act. Some disputes have dragged on long enough to convince buyers to walk away from purchases, leaving the properties fallow for years.
The economic impact is huge.
According to the Connecticut Economic Resource Center, the businesses represented in the filings — had their transfer requests been completed and verified — would have generated $178 million in tax revenues for the state and local governments in 2019.
Connecticut and New Jersey are the only two states with a Transfer Act.
“I’m not sure this uniqueness actually gets to the point of what we want to achieve in the state of Connecticut, which is economic growth,” Needleman said.
Hartley said the group’s goal is also to modernize the Transfer Act. Since the statute was overhauled in 1995, “banks underwrite differently, technology is different.”
Sen. Christine Cohen, D-Guilford, said, “people are triggering the Transfer Act that don’t necessarily need to be in it. It is hampering business so we need to address it.”
Elizabeth Barton, an attorney with Day Pitney who is a member of the working group, said that just because a property doesn’t fall under the Transfer Act doesn’t mean it’s not being looked at for environmental issues.
Needleman said DEEP may want to clean up “every ounce of dirt” in the state of Connecticut, “but that’s just not going to happen. We have been an industrial state for 150 years and we have a lot of properties.”
Needleman wants to scrap the current Transfer Act and start building a program from scratch.
Others argued that wasn’t the charge of the working group and they should work to change the statute that already exists.
The next meeting of the working group will be around mid-September.